Supply Chain Metric's & Measurements, Logistics KPI's for Management

Supply Chain measurements or metrics such as Inventory Turns, Cycle Time, DPMO and Fill Rate are used to track Supply Chain performance. Commonly used by Supply Chain Management, metrics can help you to understand how your company is operating over a given period of time. Supply Chain Measurements can cover many areas including Procurement, Production, Distribution, Warehousing, Inventory, Transportation, Customer Service - any area of logistics. However, a good performance in one part of the Supply Chain is not sufficient. Your Supply Chain is only as strong as its weakest link. The solution is for you to focus on the key metrics in each area of your Supply Chain.

As you view the links to the left, there are a few things to keep in mind:
1. Tracking your Metrics allows you to view your performance over time and guides you on how to optimize your Supply Chain. It allows management to identify problem areas. It also allows for comparison to other companies through like industry benchmarking.
2. Certain metrics, such as Inventory Turns, have a widely accepted definition. Other metrics, such as Backorders, may need to be customized for your particular industry or logistics business model.
3. Measurements alone are not the solution to your weak areas! The solution lies in the corrective actions that you take to improve the measure. The solution should come from process or system improvements.
4. Measurements should have owners....people or departments that are responsible for achieving a target on the metric. Supply Chain Management needs to encourage and support the process changes to achieve the desired targets.
5. Make sure your KPI's are balanced. As an example, don't have an inventory reduction metric without also having a service level measurement also in place.

Using the correct set of metrics can help you gauge if you have the proper balance between service and cost.
But how do you optimize your Supply Chain performance? How can metrics lead to an improved logistics management of your Supply Chain? How do you calculate Inventory Turns, Fill Rate or Backorders?

Although metrics do vary, we give you a general overview of some common Supply Chain Measurements in use today.
f Just click on the links to the left to learn more about the basics of Supply Chain Management Metrics.

The goal of this website is to give a basic overview of Supply Chain metrics that cover Inventory, Sourcing, Manufacturing and Distribution.

How can you use Supply Chain Metrics to improve your logistics operation?
Try following these basic steps:
1.The first step is to identify the metrics that you want to use. Do not use every metric available. Rather, focus on the vital measurements the mean the most to your business - your KPI's.
2. Next, you need to understand the meaning of these metrics. It is not enough for management to simply view these measurements, they must also understand the meaning behind them.
3.You also need to learn the mechanics behind the measurements. What drives them...positive & negative. Try to understand the various factors that influence your results.
4. Using this information, identify weakness or areas of improvement in your current processes.
5. Set goals based on these improvement areas. The goals should be aggressive, but yet obtainable.
6. Put corrective action in place to improve your processes. Make sure all effected areas have a clear understanding of the changes.
7. Monitor your results. Did your corrective actions yield your desired results? If so, what is your next area for improvement? If you did not get the desired results, what went wrong?

Since 2001, SupplyChainMetric.com has been the leading Supply Chain measurement site on the web. If you would like to contribute a metric to our site, please email us. Unfortunately, we do not have the resources to answer individual questions.

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For information on Inventory Turns, Fill Rate Measurement, Backorder Reporting or any other Logistics Supply Chain Management Measurement (metric), click on the links to the left. The text that appears on this website is the opinion of the webmaster. Metrics may or may not be uniform across all industries. We recommend contacting a qualified Supply Chain consultant before implementing a measurement program.

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For information on Inventory Turns, Fill Rate Measurement, Backorder Reporting or any other Supply Chain Metric, click on the links to the left. The text that appears on this website is the opinion of the webmaster. Metrics may or may not be uniform across all industries. All data listed here may be used as a general guide, but it's accuracy is not guaranteed. Please consult a qualified Supply Chain professional for more details on Supply Chain Measurements. Other Supply Chain Websites
This site is owned and maintained by Michelle Taras & John Taras CPIM, PMP

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VendorManagedInventory.com - information on Vendor Managed Inventory
InventoryTurns.com - additional information on how to calculate inventory turns or inventory turnover.
SupplyChainManagementNews.com - News stories about Supply Chain Management
SupplyChainDefinitions.com - various definitions of supply chain terms
SupplyChian.com - various supply chain info (yes, i know it's mis-spelled)
SupplyChainPurchasing - a new site Michelle is developing. All about Supply Chain Purchasing.

other...
DangerousTricks.com - my 14 year old son is working on his first website. The site has video's of people doing extreme stunts.